Drugmakers Wait For FDA to Rule

March 06--Federal regulators approved 21 drugs last year, the
smallest total since 2007, and the tougher stance could have a
dampening effect on the Triangle's economy.

The Food and Drug Administration is under pressure to protect
patients, especially in the wake of high-profile health problems
caused by controversial medicines such as the painkiller Vioxx and
the diabetes treatment Avandia.

But increased scrutiny by the FDA is creating more uncertainty
among drug developers and investors. Those worries could weaken
interest in research and lead to less investment and fewer jobs at
local companies.

This region is home to one of the country's largest
concentrations of pharmaceutical and biotechnology research and
business. Companies range from small startups spun out of
universities to massive corporations such as Glaxo Smith Kline and
Talecris Biotherapeutics.

This week, two Triangle drug companies, Salix Pharmaceuticals
and GSK, expect to receive word from the FDA that will help
determine the fate of key medicines with the potential to be worth
billions of dollars.

Salix officials warned last month of disappointing news: The FDA
will say it isn't ready to approve an existing drug as a new
treatment for irritable bowel syndrome. The setback caused the
company's stock to drop more than 20 percent.

The FDA also is expected to rule on Benlysta, the first medicine
to treat lupus in more than 50 years. The drug, which was developed
by GSK and partner Human Genome Sciences, is expected to reach
annual sales of more than $2 billion if it wins approval.

An FDA advisory panel recommended approval last year, but the
agency announced in December it needed three more months to make a
decision.

Congress passed a law in 2007 that gave the FDA more authority
to enforce drug safety, even after it approves a drug for patients.
The agency can require more tests and order companies to provide
more oversight of medicines, all of which can increase costs.

"In this regulatory environment, such hurdles to investment in
development may be too high for smaller biotech companies to
clear," Deirdre Connelly, GSK's president of North American
Pharmaceuticals, recently told a biotech conference in Raleigh.
"Even large companies are choosing to give up on research if the
cost is too high."

GSK has spent the past several years cutting costs, including
hundreds of local jobs, to offset slower revenue growth, lower
reimbursement rates and increasing competition from generic
drugs.

Patients accept risk

Health advocates and other critics say the FDA’s tougher
policies toward new drugs are long overdue and are saving lives.
But many patients and physicians say it’s causing
hardship.

Some diseases, including lupus and irritable bowel syndrome, or
IBS, have limited treatment options. And people who suffer from
such ailments say they're willing to accept risks that come with
almost every drug.

Salix's Xifaxan is already approved to treat travelers' diarrhea
and hepatic encephalopathy, a rare liver condition. The results of
a major clinical trial, which the New England Journal of Medicine
published in January, showed success in treating IBS.

Since Salix announced that the FDA would likely delay approval
of Xifaxan for IBS and require further testing, doctors, patients
and patient advocacy groups have been lobbying the agency and
Congress.

Several other promising medicines for IBS have been blocked or
delayed by the FDA, Jeffrey Roberts, president of the IBS Self Help
and Support Group, wrote in a letter to the agency. The group has
41,000 members.

"I believe (again) there is a lack of understanding about the
quality of life issues facing an IBS patient each and every day and
the risk(s) that IBS patients are willing to accept for access to a
medication," Roberts wrote.

Salix officials are waiting to get more details from the FDA
this week. Analysts expect Salix could scrap efforts to get new
approval for the medicine if further testing would be too costly.
And the company will probably cancel plans to hire additional
employees to help sell and promote the drug.

"This development was unexpected and disappointing to the
company, as we imagine it will be to our employees and
stockholders," Salix CEO Carolyn Logan said on a conference call
with analysts. "We also are concerned for the many patients
suffering from [IBS] and the physicians who treat them, who have
limited approved treatment options."

Industry pushes back

Drug industry officials are calling on lawmakers to consider
ways to reduce the regulatory hurdles imposed by the FDA.

"Many constituents have raised concerns with me regarding the
lack of regulatory certainty and transparency at FDA," Republican
Sen. Richard Burr said in a prepared statement. "A lack of
predictability and unnecessary delays do not benefit patients or
encourage innovators to work with the FDA to pursue life-saving
drugs and devices. Regulatory certainty is critical for our
nation's patients and maintaining America's leadership in medical
innovation."

Steady at the FDA

The FDA's standards have not changed, and the agency's approval
rate has remained steady for the past several years, spokesman
Sandy Walsh said. In 2007, the FDA cleared 19 new drugs, the fewest
in 24 years.

"All applications are judged on their own merits based on the
data and related information submitted to the FDA," she added.

It can cost more than $1 billion to test and bring a new
medicine to market. Many fail long before reaching the final FDA
review process, wiping out millions spent on research and clinical
testing.

Last month, Inspire Pharmaceuticals of Raleigh announced it
would cut 65 jobs, or a quarter of its work force, after a
disappointing clinical trial of an experimental cystic fibrosis
drug.

Research opportunities

Beyond safer drugs, there are other potentially positive
outcomes from a tougher FDA.

For starters, the Triangle is home to dozens of companies that
help drug makers test experimental medicines. Those contract
research organizations, such as Quintiles, Inc Research and PPD,
have seen a big boost in business as the FDA requires more clinical
tests.

And while big drug companies, with their huge fixed costs, are
suffering as fewer blockbuster drugs make it to market, it’s
creating opportunities for smaller companies with promising
products, said Richard Kouri, executive director of BioSciences
Management at N.C. State University.

Some small companies can succeed with drugs that treat 50,000
patients, rather than needing millions of potential patients to
make a profit, he said.

"We have a pretty strong entrepreneurial spirit and structure in
the Triangle," Kouri said. "We have great strength in our idea
factories, the universities."

But investors are increasingly reluctant to make bets on
startups that face the "regulatory zeal" the FDA is demonstrating,
said Dennis Dougherty, a veteran venture-capitalist with Durham's
Intersouth Partners.

He expects broader efforts to reduce burdensome regulations at
the federal level will include some restructuring of the FDA's
role.

"Venture capitalists are paying more attention than ever to the
FDA hurdles and regulatory risk companies will face," he said.
"We'd like to see them have an attitude of helping companies meet
the requirements of providing safe and effective drugs, and maybe a
little less of an adversarial position."

Staff writer David Bracken contributed to this report.

alan.wolf@newsobserver.com or 919-829-4572

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